TOKYO, Jan 25 (Reuters) - Japan's Nikkei index touched a
one-year low on Tuesday, weighed down by investor caution over
the situation in Ukraine, broadening inflationary risks and on
concerns of a faster-than-expected U.S. rate hike by the Federal
The Nikkei share average fell 2.5% to 26,890.94, its
lowest level since Dec. 29, 2020.
At 0516 GMT, the Nikkei index was down 2.1% at 27,001.91.
The broader Topix lost 2.18% to 1,887l.70.
The Mothers Index of start-up shares fell more than
5% to its lowest since April 2020.
Technology stocks dragged the Nikkei lower, with start-up
investor SoftBank Group losing 5.75%, chip-making
equipment maker Tokyo Electron falling 3.11%. Motor
maker NIDEC slipped 4.8%.
Wall Street bounced back from a steep sell-off to close
higher overnight, with bargain hunters pushing the indexes into
a positive territory.
Investors are keenly watching every move of the U.S. Fed as
the central bank will begin its two-day meeting later on
Tuesday, with investors starting to speculate that there is a
small possibility that they will announce a surprise rate hike.
In a sign that geopolitical tensions are heating up, NATO
announced it was putting forces on standby to prepare for a
potential Russian invasion of Ukraine.
"Investors became cautious after seeing the steep falls on
Wall Street last night, and they became even more sensitive to
declines in U.S. futures today," said Shoichi Arisawa, general
manager of the investment research department at IwaiCosmo
"The market will remain like this until the FOMC (Federal
Open Market Committee) is over but after tomorrow, with the
earnings season kicking off, investors will start hunt for
stocks with good earnings."
Nihon M&A Center Holdings tanked 12% after the
broker for mergers and acquisitions for small firms delayed its
Defense-related stocks advanced amid tension between Russia
and NATO, with Ishikawa Seisaku jumping 11.96% and Howa
Machinery rising 5.5%.
(Reporting by Junko Fujita, additional reporting by Tokyo
markets team; Editing by Sherry Jacob-Phillips)